1. Basic Concepts Flashcards
When human wants for goods and services exceed the available supply
Scarcity
Has a degree of scarcity and opportunity cost
Economic Goods
No opportunity cost, abundance
Free Goods
What you give up to obtain what you desire, value of next best alternative
Opportunity Cost
Examination of costs and benefits, weighing/comparing 2 things
Marginal Analysis
= Total 1 - Total 2, not the average
Marginal Change
As we consume more of a good or service, the utility we get from additional units of the good or service tends to become smaller than what we received from earlier units
Law of Diminishing Marginal Utility
Free will/creates value, both parties win from the same transaction
Trade
Extra fees added to the value
Transaction Costs
The middle person in between transactions, handles transaction costs
Intermediaries
With other relevant/conditions/factors remaining the same
Ceteris Paribus
